For Immediate Release
Chicago, IL – September 11, 2026 – Today, Zacks Investment Ideas feature highlights Macy’s M.
Should Income Investors Buy the Dip in Macy’s Stock After Earnings?
Macy’s shares have slipped as much as 8% after the department-store giant reported Q2 results on Thursday morning, despite beating expectations and raising its full-year outlook.
The post-earnings pullback may be worth a closer look for income investors, particularly as Macy’s turnaround gains traction and its roughly 3.5% dividend yield appears increasingly well supported by improving cash generation and a healthier balance sheet.
Macy’s Q2 Results Strengthen the Turnaround Narrative
Macy’s delivered one of its better quarters in recent years, with net sales rising 1% year over year to $4.87 billion and edging estimates of $4.82 billion. Reported adjusted EPS reached $0.63, up from $0.35 a year ago, but management disclosed that the quarter included a $0.23-per-share net benefit from tariff refunds.
Excluding that benefit, Q2 adjusted EPS was $0.40, representing a much more modest 14% year-over-year increase and still topping expectations of $0.37 per share by 8%. Notably, Macy’s has now surpassed earnings expectations for seven consecutive quarters and has exceeded sales estimates for six straight quarters.
Furthermore, companywide comparable sales increased 2.7%, marking the fifth consecutive quarter of positive comps. Adjusted EBITDA also climbed to $457 million from $373 million, with the adjusted EBITDA margin improving to 9% from 7.5%.
Importantly, the results suggest Macy’s “Bold New Chapter” turnaround strategy is gaining traction rather than relying solely on cost cuts. Comparable sales at its Reimagine 200 Macy’s locations rose 1.9%, while Bloomingdale’s surged 11.3% to its highest second-quarter sales volume ever, and Bluemercury comps increased 6.2%.
Management subsequently raised its fiscal 2026 outlook, now calling for net sales of $21.68-$21.83 billion and adjusted EPS of $2.15-$2.35, compared with its previous EPS forecast of $2.00-$2.20.
Macy’s Dividend Looks Increasingly Sustainable
For income investors, Macy’s improving cash position may be just as important as its earnings recovery. The company generated $586 million of operating cash flow during the first half of the year, more than double the $255 million generated during the comparable period last year.
After $324 million of combined property, equipment, and capitalized software spending and $35 million of asset-sale proceeds, Macy’s produced roughly $297 million of cash flow after capital expenditures, comfortably covering the $101 million it paid in dividends.
